Varcoe: Alberta should explore importing hydro from other provinces

As Alberta and Saskatchewan move away from burning coal, there are looming questions ahead on how the two provinces can fill the power vacuum.

Should we turn to natural gas to create more electricity? Is momentum finally blowing behind wind? Is the spotlight now on solar?

How about hydro?

A new report by the Canada West Foundation says hydroelectricity is often overlooked, but “is the most cost-effective renewable energy source as the provinces work toward reducing electricity-based emissions.”

It also might have the added benefit of helping Alberta negotiate a deal with British Columbia to get an oil pipeline built to the West Coast.

“This is an important conversation for Albertans, the cost associated with moving away from coal,” says report co-author Naomi Christensen.

“We just really want to see people talking about all the different options.”

The debate on what power source is the best for Alberta takes place during a fundamental overhaul of the province’s electricity market.

The Notley government wants to close all coal-fired power plants by 2030 and increase the supply of renewable electricity. But it will also need a stable supply of power that can be relied upon in all seasons and all times of the day or night.

Coal has been king in Alberta for decades.

In 2014, coal-fired electricity made up about 55 per cent of all the power generated in the province, according to the report by the Calgary-based think tank. However, it’s also a large source of greenhouse gas emissions.

The electricity sectors accounted for 17 per cent of Alberta’s and 21 per cent of Saskatchewan’s total emissions that year, the study found.

Both governments have ambitious plans for renewables such as biomass, wind and solar.

The Alberta government wants renewable energy sources to make up 30 per cent of all generation in the province by 2030, while Brad Wall’s government in Saskatchewan believes half of all generation capacity should be from such sources within 14 years.

Renewables only supplied nine per cent of Alberta’s power generation in 2014, and one-quarter in Saskatchewan.

Wind and solar are seen by many as logical options to fill the gap quickly, but are more expensive and lack the reliability of natural gas.

The report says hydro has the longest lifespan and lowest operating cost of non-emitting power sources.

Alberta could see new hydroelectricity plants built in the province; several companies, including ATCO Ltd. and TransAlta Corp., recently said they are examining potential projects.

However, it also requires massive capital investment — the new Site C hydro project in British Columbia is pegged to cost $8.8 billion — and would take years to develop. There are also environmental issues to overcome.

“A real selling point for importing hydro is that it can be done in a faster time frame,” Christensen says. “Bringing hydro online from either B.C. or even perhaps Manitoba should be something that’s considered.”

Alberta Environment Minister Shannon Phillips says wind and solar have certain advantages over hydro in their cost and quick time frame to build. However, the province will hold a competitive procurement process as it moves ahead with selecting new renewable projects.

“We’re open to anybody who has a good project, if it can be competitive within the current structure of the market,” Phillips says. “We need to make sure we keep those costs as low as possible.”

The federal government should consider investing in improving intertie power lines between the western provinces, which would allow Manitoba to sell more hydro in Saskatchewan, and B.C. to do the same in Alberta, says Christensen.

B.C. Premier Christy Clark wants to market surplus hydro power to Alberta and has pitched the Trudeau government on spending up to $1 billion to improve an intertie line between the two provinces.

Premier Rachel Notley said this spring she would only be open to buying hydro from British Columbia if the province can finally get oil pipelines built to the coast. Alberta Energy Department officials said Monday talks between the two provinces around Site C are “ongoing.”

Not everyone is convinced Alberta will ultimately want to acquire power from the Site C development in northeast British Columbia.

Harry Swain, a former federal deputy minister and past chairman of the joint federal-provincial review panel on the Site C project, believes the costs would be much higher — more than double — for Alberta to buy surplus B.C. power than produce it from a natural gas plant in this province.

“If the wholesale prices of power moved up considerably in Alberta … then under certain circumstances, the Site C power might be attractive — but it sure isn’t now,” he says.

With B.C. eager to sell its surplus hydro and Alberta needing to get a new oil pipeline built, there’s also politics at play on both sides of the Rocky Mountains.

The over-arching question is what makes the most sense for Albertans.

A power vacuum lies ahead and all options should be on the table. Hydro may not be the obvious choice, but it also might help quench Alberta’s thirst for additional electricity.

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